AIG to investigate Goldman Sachs trades

14 May 2010

An internal inquiry is being undertaken by American International Group (AIG) into trades made during the financial crisis with firms including Goldman Sachs, the company has announced.

Robert Benmosche, AIG chief executive officer, made the comments during the firm’s annual general meeting.

Mr Benmosche was asked by a shareholder about the company’s relationship with Goldman Sachs, as AIG had worked with the financial institution on deals similar to the Abacus transaction.

This led to an investigation by the Securities and Exchange Commission (SEC), which accused the bank of deliberately misleading investors.

AIG’s CEO was quoted by Bloomberg as saying that an investigation had been launched and a law suit could be instigated if any wrongdoing was found.

“We have fine lawyers, we are looking at all of the activities that occurred. To the extent we find anything that was done wrong, or any harm to AIG that should not have happened, our legal staff will take appropriate actions,” he explained.

AIG did not work with Goldman Sachs directly on the Abacus deal which led to the SEC filing.

Meanwhile, AIG recently replaced Goldman Sachs as a consultant with Citigroup and Bank of America.

The latter firms have been hired to advise the insurer on a plan to pay back government funds it used to stay afloat during the global financial crisis.

By Jim Ottewill

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